Not Quite DOA: Why Reports of the Demise of the President’s Budget May be Exaggerated

Not Quite DOA: Why Reports of the Demise of the President’s Budget May be Exaggerated

Anyone who has spent a few years in Washington knows the federal budget dance: President stands behind podium with a fancy seal and flags and unveils a giant tome. The next morning newspapers declare the tome DOA, Dead on Arrival. And we all return to regularly scheduled programming.

This year was no exception. Even the White House seemed to acknowledge the fact by releasing the 182-page blueprint on the same day as the Iowa caucuses with Donald Trump, Bernie Sanders and Ted Cruz grabbing the headlines.

But budget nuggets have a way of seeping into the policy fabric and eventually taking hold. Legislative staff scrub the document for ideas, not to mention numbers. Candidates steal liberally, adding favorites to their rhetorical arsenal. Eventually, some of those candidates become lawmakers, cabinet secretaries and even president. So the ideas live on.

Happily, President Obama chose his final budget proposal to draw attention to the inexplicable, indefensible rise in drug prices in this country. Our nonprofit, provider-sponsored plans know better than most the clinical value of so many of today’s medications. At ACHP, we have the privilege of partnering with organizations that are in pursuit of the 4Rs – the Right patients receive the Right treatments at the Right time for the Right price. From Capital Health Plan’s Center for Chronic Care, which reduces health costs for the entire community by providing concierge-type care for the sickest one percent of Capital members, to Group Health Cooperative of South Central Wisconsin’s pioneering initiative embedding pharmacists in primary care clinics to track patients who may need additional treatment management, ACHP members are working to ensure patients always receive the medications they need.

And our members also know a medication is worthless if patients can’t afford it. Consider the trajectory of insulin: One in 11 Americans has diagnosed or undiagnosed diabetes, with this number expected to rise to one in three by 2050. Because of escalating drug costs, spending on insulin and other diabetes medications is expected to rise by 18.3 percent over the next three years – 60 times greater than the recent income growth average of.3 percent across the U.S. Clearly,high drug costs are not just fueled by breakthrough discoveries or so-called orphan drugs.

And the Administration agrees. Obama’s final budget proposal of his presidency includes several provisions to begin to address the unsustainable cost trajectory.

First, the White House budget calls on drug makers to cooperate with price transparency initiatives. The proposal calls on pharmaceutical manufacturers to publicly report production costs, including funding for research and development, manufacturing, distribution and marketing expenses.

The budget proposal also prohibits pay-for-delay tactics, which occur when manufacturers with branded medications nearing patent expiration reimburse other companies to delay the release of lower-cost generic replacements. In addition, the budget plan reduces the length of patent exclusivity drug makers may obtain for costly biologics drugs from 12 to seven years.

Finally, the President’s budget would allow the secretary of Health and Human Services to negotiate prices for biologics and other high-cost drugs with manufacturers, and grant states the authority to collectively bargain with manufacturers to acquire discounts on Medicaid drug prices.

None of this is easy. Fostering innovation takes resources and ingenuity. Pharmaceutical companies and clinicians ought to be collaborating on the best strategies for appropriate medication use. And election year politics are certain to roil the already tumultuous atmosphere on Capitol Hill.

Press Contacts

Making Health Care Better

The Alliance of Community Health Plans is a national leadership organization bringing together innovative health plans and provider groups that are among America’s best at delivering affordable, high-quality coverage and care. Our plans are shaping the future of health care - driving better health outcomes, building healthier communities and inspiring an entire industry to do better.